UnitedHealth Just Proved Warren Buffett Right -- Again
Summarize this article with:
By Keith Speights – Apr 23, 2026 at 4:44AM ESTKey PointsUnitedHealth Group was struggling when Buffett bought the stock last year.The healthcare giant's Q1 results announced on Tuesday appear to indicate the start of a turnaround.Buffett's strategy of buying good businesses on sale while ignoring the noise appears to be paying off yet again.Flashback to the second quarter of last year. The wheels seemed to be coming off for UnitedHealth Group (UNH +2.17%). The healthcare giant first revised its full-year outlook downward, then yanked the guidance altogether. Its CEO was shown the exit door. Reports surfaced about an investigation by the U.S. Department of Justice. UnitedHealth's stock was sinking fast. But there was at least one major investor who wasn't worried. Warren Buffett initiated a $1.6 billion stake in the health insurance stock for Berkshire Hathaway's (BRKA 0.10%) (BRKB 0.66%) portfolio. Buffett saw an overreaction related to temporary issues facing a company that remained fundamentally strong. Now, let's return to the present. UnitedHealth Group reported its first-quarter results on Wednesday. And the investing world got to see why Buffett earned the nickname "the Oracle of Omaha." UnitedHealth proved Buffett right -- again. Image source: The Motley Fool. Anatomy of a turnaround Berkshire Hathaway is a leader in the property & casualty (P&C) insurance market. Although P&C is different from health insurance, Buffett knew of one common denominator: when insurers' bottom lines suffer, they can nearly always raise rates to fix the problem. UnitedHealth said last year that it planned to raise rates. It followed through with that promise, and it showed in the Q1 results. The company's medical cost ratio (calculated by dividing total medical care costs by total premium revenue collected, less taxes and fees) fell from 84.8% in the prior-year period to 83.9% in the recent quarter. This improvement wasn't the result of declining medical costs. Tim Noel, CEO of the company's UnitedHealthcare business, said in the Q1 earnings call, "We continue to see the utilization patterns continuing with high, elevated levels that we experienced in 2025." UnitedHealth Group delivered better-than-expected revenue and earnings in Q1. The company also raised its full-year earnings guidance. CEO Stephen Hemsley painted a picture in the earnings call of the early stages of a bona fide turnaround story. ExpandNYSE: UNHUnitedHealth GroupToday's Change(2.17%) $7.51Current Price$353.52Key Data PointsMarket Cap$321BDay's Range$349.10 - $358.5652wk Range$234.60 - $429.90Volume18KAvg Vol10MDividend Yield2.50% Chalk up another good call for Buffett UnitedHealth's Q1 update was a big win for the company and its shareholders. It should also serve as a reminder of why Buffett's investing strategy works. Buffett didn't pay attention to the noise last year. He didn't worry about the uncertainty. The legendary investor understood UnitedHealth's business well enough to realize that its issues were only temporary. He also did enough research to know the company remained financially strong. By the way, Buffett didn't panic and sell earlier this year when the Centers for Medicare and Medicaid Services (CMS) announced ridiculously low proposed Medicare Advantage rates for 2027. He waited. CMS ultimately came back with much higher rates. The big takeaway for investors here is to buy great businesses when they're on sale and hold the stocks through any turbulence. This approach has paid off for Buffett over the long term. It can pay off for other investors, too.Read NextApr 21, 2026 •By Patrick SandersUnitedHealth Group Surprises Wall Street.
Is It Time to Load Up on the Beaten-Down Buffett Stock?Apr 21, 2026 •By James BrumleyWhy UnitedHealth Stock Is Up TodayApr 21, 2026 •By Motley Fool TranscribingUnitedHealth (UNH) Q1 2026 Earnings TranscriptApr 12, 2026 •By Patrick SandersMarket Crash: This Dividend Stock Becomes a No-Brainer Buy at a DiscountApr 10, 2026 •By Parkev Tatevosian, CFAMassive News for UnitedHealth Stock InvestorsApr 7, 2026 •By Billy DubersteinWhy UnitedHealth Group Rallied TodayAbout the AuthorKeith Speights is a contributing Motley Fool healthcare analyst covering publicly traded companies across pharmaceuticals, biotechnology, medical devices, technology, and marijuana. Prior to The Motley Fool, Keith was CEO of Constant Care Technology, a healthcare technology company; vice president of American HealthTech, a healthcare software company; and a director of operations for Blue Cross Blue Shield of Mississippi, a health insurer. He holds a B.S. in Industrial Engineering from Mississippi State University.TMFFishBizStocks MentionedUnitedHealth GroupNYSE: UNH$353.52(+2.17%)+$7.51Berkshire HathawayNYSE: BRKA$702,980.00(-0.10%)-$720.00Berkshire HathawayNYSE: BRKB$465.40(-0.66%)-$3.10*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.